12 July 2010

Yes, split IID in two

This article details problems at Imperial Irrigation District, where the energy division is subsidizing the water division. (IID irrigation water costs about $20/af.)

The subsidy arrives via the fixed charge that water charges power for the "falling water" that generates energy on its way to irrigation canals. Why the fixed charge?
IID Director Jim Hanks said the fixed falling water charge was adopted to allow the finance department to better plan its funds for the year, since the adjustable charge varied.
In other words, IID accountants are lazy.

I'd LOVE to have a fixed gas price, so I could "plan my funds" for the year, but that's not going to happen. It can at IID, because it runs its co-mingled businesses like a bureaucracy, not two businesses that have real costs that vary.

This seems a good time to recall that I've suggested that IID energy and water be split into two separate businesses, and they should be.

Bottom Line: Split IID in two, and watch energy and water management efficiency rise.

2 comments:

Mike Wade said...

Where is the subsidy? The blogger exhibits a lack of understanding of the ongoing operations at IID. The infrastructure that delivers the water to create the energy was built by the water side of IID. The energy department is simply paying the expense to create the power that is then delivered to its users. The IID directors, elected by the people, periodically review this arrangement to provide the best service to the customers of IID.

Mike Wade
California Farm Water Coalition

David Zetland said...

@Mike ("The Commentator") -- IID has implicit subsidies from its water rights and explict ones from power to water. What's not clear to you? The BoD of IID does NOT serve farmers; it serves urbans. Doesn't that bother you?